The midland journal. (Rising Sun, Md.) 1885-1947, 1887-08-26
Property Of Railroads.

The railroad goes right along making
money, whether any other industry
makes any or not. The statement is
made and reiterated over and over
again by apologists for railroad extor-
ton that there is failure to make a
great deal of railroad property pay a
profit. We have always admitted that.
Some roads are badly managed, others
are stolen into bankruptcy and still
others are built where there is not
enough traffic to support them. 1t is
not fair to take such roads into consid-
Grafton at all when estimating the ex-
tent of the extortion practiced by our
railroad management. 1t is the prom
inent and paying roads that give US the
most trouble; and any one of these is
earning plenty of money right along.
Poor's Railroad Manual, reliable and
standard book on the details of railroad
management, states that the gross earn.
ings of the railroads IN the United
in 1885, were S770,6S4,9 ,908, and the
net earnings were S26S, ,l06,25S. 1t is
estimated that all forms of Indebtedness
upon our railroads-mortgages, bonds
and stocks amounted to S7,676,399,.
900, two billions of which Mr.. Poor
estimates to be watered stock, a very
low estimate we believe. There is the
best of evidence to show that but one
fourth of the railroad stock of this
country represents any value. The
balance is "water." 1t is believed, and
we think we can show, that the bona
1tde railroad stock of the United States
is earning from eight to ten per cent
without intermission.
The Tribune of this city in comment.
ing upon the earnings of railroads says
the people not only delray the cost of
running the roads, but they are paying
the current rate of interest on tons of
fictitious stock, as we'll as on the capi.
tai actually invested in railroads. The
net earnings last year amounted to
nearly four per cent on all the multipli-
ed layers of bogus stocks, in addition to
the genuine evidences of railroad in
debtedness. Such method of calcu,
lation, however, is wholly unfair, and
eight per cent must be accepted as an
approximately correct statement of the
average earnings of all the railroads
in the United States-a rate that is at
least doubled by the more powerful an d
prosperous and judiciously managed
trunk lines. These rates can be reduc-
ed without "ruin" to any one. A large
proportion of the old railroad bonds
bearing seven and eight per cent are
now coming due, and will be refunded
at four and FIVE per cent or lower, so
that the fixed charges of the roads will
be greatly cut down. At any rate they
are now exacting disproportionate
share of the wealth annually produced
more than the farmers can stand :,
more than the traffic will continue to
bear.
1t also says that it is useless for rail.
road managers to claim that it will
bankrupt the roads to give lower and
better equalized rates. Facts and figures
effectually disprove all such assertions.
The railroads are now earning double
the current rate of interest of good
security on the capital actually invested,
and they have Immediately before them
the prospect of refunding a large
amount of their bonds at one half the
interest they have been paying, These
facts are not refuted by pointing to
bankrupt lines, built where there was
no need for a railroad, and not enough
traffic to pay for operating expenses.
The time is cpportune for readjust
ment and equalization Of railroad rates
in accordance with the lowering of in.
terest charges. S. Western Rural